Financial Benefits To Individuals In Light Of Impact From Covid-19
In a bid to provide relief to the public from the financial impact of COVID-19, the Government of India announced various economic relief measures. This article takes a look at some of the actions that the Government has undertaken to ease individual taxpayers:
Deadline of Filing Taxes Extended
The Government announced the extension of the tax filing deadline for all individual taxpayers. Instead of filing tax returns for the financial year 2019 by Mar 31, individuals have the option of paying their taxes until Jun 30.
Premature Withdrawal from EPF Non-Taxable
Withdrawal from Employees Provident Fund (EPF) is restricted for employees currently in service. However, the Government has removed the restriction, allowing employees to obtain non-refundable advances from the existing balance in their EPF accounts.
Deadline for Submitting TDS Exemption form Extended
Individuals with income below the taxable threshold have also received some relief so that they can seek exemption from Tax Deducted at Source (TDS) on interest income. The Income Tax Department has extended the deadline for individuals to submit Form 15G and 15H. Furthermore, the department has stated that the forms provided by people in the last fiscal year will remain valid until Jun 30, 2020.
Deadline of Paying Disputed Taxes Under VSV Scheme Extended
The Vivad Se Vishwas (VSV) Scheme is designed to decrease prolonged litigations in matters of disputed taxes. Before the lockdown was announced, applicants under VSV, had to pay the disputed taxes by Mar 31, and pay an additional sum in case of delayed payment. However, according to the latest announcement, individuals can pay the disputed taxes up until Jun 30, without any increase in the amount.
Pending Tax Refunds to Be Immediately Processed
The Income Tax Department also announced that it would issue all pending tax refunds to businesses as well as individuals.
Interest on Delayed Payment of Advance Taxes Lowered
In a bid to ease hardships, the interest rate charged on late payments of advance taxes, equalisation levy, TDS and other advance taxes has been reduced. Apart from paying some interest, taxpayers will not face any prosecution for delayed payment of advance taxes.
Tax saving deadline through investments and donations increased past the financial year
Earlier individuals who wished to avail of 80C deductions could only claim the ones completed before the end of the fiscal year. However, post the announcement, individuals can gain deductions on all investments and donations made until Jun 30, 2020. Individuals can also claim a 100% deduction for all contributions made to the PM CARES Fund set up by the Central Government.
The end of the financial year usually marks a rush in filing returns, paying disputed taxes, and completing yearly investments. The advent of COVID-19 has slowed all normal activities and has almost halted the economic machinery.
In a bid to bring relief to taxpayers who may be facing a cash crunch owing to lack of liquidity, the Government has announced the above relief measures. All of these extensions and schemes are designed to ease the impact of lockdown on individuals. You can donate money to the PM CARES Fund, opt for EMI moratorium, or pay your taxes through our website and mobile apps.
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